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Countdown to the Closing Bell

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U.s. 9, Cyprus 7, Peter Barnes 3, S&p 3, William Poole 3, Us 3, United States 2, Legalzoom 2, New York 2, Nicole Petallides 1, Neil 1, Dragon 1, Equimark 1, Hershey 1, Robert 1, Hensley 1, Chris Gore 1, Ben Bernanke 1, Alick 1, Janet Long 1,
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  FOX Business    Countdown to the Closing Bell    News/Business. Stock  
   market updates. New.  

    March 20, 2013
    3:00 - 4:00pm EDT  

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>> thank you, mr. chairman. from "bloomberg." it's chris gore something you would consider to be a successful transmission of monetary policy? and especially given how well the fed does the banks are capitalized. >> well, the tightening of credit mortgage markets, our sense is it has gone too far. some was obviously needed, there were people who bought houses prior to the crisis really couldn't sustain a mortgage. the terms and conditions have been tightened up and we are now seeing much higher credit quality requirements on potential borrowers.
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we are concerned a variety of factors like concerns about the tax the banks may have, uncertainties about regulations which we are working on to get done as quickly as possible may have tightened the mortgage credit box more than would be desirable in the long run help the eeonomy. that has effect on my trade policy, one of the more powerful tools we have is in a state of home buying and related indust industry, so that is an issue we take into account. i would say one thing, as the housing industry has strengthened, home prices have gone up, that has brought some people into the credit box in the sense the number of people who are underwater in their mortgages is declining as house prices go up. so if people have bigger down payment, bigger equity in their homes, they become more creditworthy.
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i don't want to overstate it, but monetary policy by strengthening the housing market, helping support house prices is bringing more people into the mortgage market. >> peter barnes of fox business, sir. the stock market has been hitting all-time highs, it has recovered all of its losses from the financial crisis, just wants to know if i still have time to get in. but seriously, how do you feel about that, is it good, is it bad, mission accomplished? and are you worried about bubbles? we're still a 7.7% unemployment. >> that is right. we are not targeting asset prices, not measuring success by terms of the stock market. we are measuring success by the mandate which is employyent and
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price stability, that is what we are trying to achieve. we do monitor the entire financial system not just the parts that we supervise or regulate, including the stock market and other asset markets. i don't want to now be pulled into going through every individual financial market and assessing it, but in the stock market we don't see at this point anything that is out of line with historical patterns. in particular you should remember of course while the dow may be hitting a high, is nominal terms, not real terms. if you adjust for inflation and the growth of the economy, we're still some distance from the high. it is not all that surprising the stock market would rise given that has been increased optimism about the economy and the share of income going to profits has been very high.
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relationship between stock prices and earnings is not particularly unusual at this point. >> the associated press. mr. chairman, statement mentions fiscal policy has become more restrictive. how much of a drag do you see from the social security tax increase and the across-the-board spending cuts that went into effect on march 1 and is it possible the fed might see a need to provide more support to the economy because of that drag on the fiscal? >> our analysis is fairly comparable to analysis congressional budget office presented to the congress and thestimate put together the fisl
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measures including the fiscal cliff deal, they sequester and other cuts that federal fiscal restraint in 2013 is cutting something like 1.5 percentage points off of growth to which is very significant. so that is an issue for us. we take as given with the fiscal authorities are doing, the economy is weaker, job creation is slower than it would be otherwise so that is one of the reasons our policy has been as aggressive as it is. that being said as i'v i have sd many times, cannot offset the fiscal restraint of that magnitude and so the final outcome will be worse for in terms of jobs than would have been the case with less fiscal restraint. i want to emphasize i do believe long-term fiscal stability is
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extremely important and i urge congress administration as i always do to do whatever's necessary to put us unsustainable fiscal path going forward, but in doing so it is a good idea to pay attention to the impact in the near term on what is still not a completely satisfactory recovery. >> mr. chairman, good afternoon. you earlier stressed he wants to see improvement in the labor market is sustained and to make that determination you have to have adequate economic growth and yet the projections in the revised summary of economic projections kind of seems like a dilemma. they have reduced the projected rate of unemployment, but at the same time lowered the growth forecast, so how do you square those two? how do you get sustained
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improvement in the labor market if the economy will slow down? >> if that happens, that is an issue, obviously. there has been some in the short run with unemployment changes and growth during this recovery and time is for unemployment has fallen relatively quickly even though growth has been more limited, so we have to monitor developments in the economy and see what happens. our projections for unemployment in the fourth quarter are noticeably lower than they were in september when we first announced the asset purchase programs, so there has been improvement in the outlook as measured by that metric. so you're right, we do need to see a sustained improvement one month, two months doesn't cut
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it. and normally you would expect that you would need to see a reasonable pace of gdp growth in order to achieve that, so we will just have to keep providing support for the economy and see how things evolve. >> dow jones newswires. in a stress test the fed recently conducted, there was an adverse scenario and similar adverse scenario, you publish results from individual banks under the severely adverse but you didn't under the nearly adverse scenario which featured inflation shock. so i have a two-part question. first, why didn't the fed publish those results and second, even if you can't share how individual banks performed, what did you learn from the results you did see under that
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adverse scenario? >> the reason for publishing severely adverse scenario, that is the ultimate asset test whether the banks sufficiently capitalized, presumably if they can survive a severely adverse scenario, an adverse scenario would obviously less strenuous and less stressful. the adverse scenario is the right one. that being said, don't say prince will reason we couldn't provide information. i will find out some point why we are doing it that way. the severely at-risk scenario is scaling up of the adverse scenario but there are some differences for example we have used some of our work to look at interest-rate risk and interest rate sensitivity and found
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generally banks can also sustained a significant increase in long-term interest rates as well for number o a number of r, one of them being higher interest rates increase the franchise value because it increases the net margin over time. so again, severely at-risk scenario is the one that really puts to the test, but what if mission will be to the press. >> "the economist." notice most of the committee members don't expect an increase in rates until 2015 or 2016 and it looks in the projections as though the expectations for the long-run rate by the federal funds target is around 4% which would be below the peak rate we
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saw before the recession. given the concerns about unconventional policy is there any feeling on the committee that perhaps recovery isn't going fast enough and more commission would be justified and has there been any change in policy targets to stay effective without much of a cushion there between the fed funds target rate? >> as you point out, we are at the zero lower now in making further accommodation not impossible but more difficult and harder to predict with more side effects difficult to predict. i am not sure i understand the whole question. we have given the guidelines for the signpost for how the fund rate is going to evolve over time and a lot of academic research shows when you are in lower bound by time the market you will keep rates low for a
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significant time, that is one way to get longer rates down and provide more stimulus to the economy. it's a pretty effective tool. now we could be going fo furthe, lower the unemployment that hit. one committee has suggested that. for right now reported t reportd guidance, the control path of interest rates that seems to give a path of unemployment or inflation about as good as it can get with monetary policy tools that we have, doesn't mean we are satisfied, just means we have enough firepower to get the economy back to full employment more quickly. i don't know if that was responsive or not.
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>> concerns of economic policy with interest policy, is a feeling it should be done in the next potential session, more room to cut rates or ar were you comfortable using the threshold aussie on an ongoing basis? speaker you're talking with inflation target, basically, is that fair? >> yet. -- yeah. speak of the argument defining % inflation is the most central banks around the world. and one might ask why stability should be zero inflation, why do you choose to present instead of zero? the answer is the question you are raising, if you have zero inflation are very close to deflation zone and nominal interest rates would be so low it would be difficult to respond to recessions. historical experience has suggested 2% is an appropriate balance between the cost of inflation and the cost you are referring to.
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we just put that number in fairly recently, at some point it is still being debated in academic circles and we will see what kind of outcome they come up with but it is interesting question to try to quantify. there is research which asks the question how often do you tend to hit the zero bound, in our belief was it is a very rare event and it has become more comments i'common so i'm sure ta lot of thinking about this in academic and other circles. >> hi, mr. chairman. investor quarterly. there is talk about certain institutions are too big to fail. in 1980 would say there was the financial sector comprised of 5%, of the u.s. economy. u.s. gdp. now it is about 9%. do you think that shift is beneficial to the u.s. economy? >> i don't think i know the
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answer to that question. certainly the financial system, i could argue in two ways, so the u.s. economy grew pretty well between 1945-1975, 1980. the financial system was much simpler and didn't have a lot of exotic rigors and so on. so that would be one way to argue maybe all this extra financial activity is not justified. on the other hand the world is a lot more concentrated, lots more international, large multinationals that are connecting resources, investors and other countries, there's a lot more demand, so i think based on that and based on the innovations and information technology in a lot of industries you would expect financial services to be somewhat bigger.
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so i don't really know the answer to that question. my predecessor paul volcker explained the only contribution financial industry is the automatic teller machine. i don't know the answer. a much bigger sector can be defined by the wider range of services globalized financial economic system that we have put the exact number i cannot really say. >> i have a follow-up question. do you think it was appropriate or fair to impose the bank deposits in cyprus, even those insured by the european union? thank you. >> have not been involved in those conversations i don't necessarily know the details.
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they are grappling with a very difficult problem. i think the issue they face is that there is a pretty big hole, financial hole, in a sense there is a fiscal issue and there is a bank restructuring capitalization issue. they are looking for resources where they can find them. i think everybody understands there are certain risks with that besides the equity issue of lower income people. there is the issue of setting a precedence that might reduce confidence in banks in subsequent times. but that being said, it is a very tough issue, and finding the resources to solve cyprus' problem, there is probably no easy way to do it and we're going to keep monitoring that, but i don't envy them that
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particular challenge. >> thank you. speak of it has been a trend the last couple of years the economy jumped out of the gate in the first part of the year only to sort of folder. is that something you're worried about this here comment does that suggest qe may have to stay the same pace it is now at the third quarter until we are sure about that? speaker you're absolutely right. there's a certain tendency for the spring slump we have seen a few times. one possible explanation for that besides the weather and so on, one possible explanation is seasonality. because of the severity of the 2007-2009, the seasonals got distorted and they may have led,
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the statistical experts, many of them deny it, this possible they led job creation and gdp t be exaggerated to some extent early in the year. our assessment is at this point we are far enough away from the recession that the seasonal factors ought to be pretty much washing out by now. if we see a slump, would probably be due to real fundamental causes and we would have to respond to that. we are planning to adjust our tools to respond to changes in the outlook and that could go either direction. >> "cbs news." i was wondering if you could tell me if a run on the banks would happen, how would that affect u.s. market and is it possible for the u.s. to leave
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the attacks do not deposits, or why not? >> as some have mentioned, cyprus is a tiny economy and i do not think these issues as worrisome as they are, and as concerned as we would be for certain people, i don't think they have direct implications for the u.s. economy. the only way they would create a problem is if the run behaved advantageous in some sense. if they lost confidence, but at this point i'm not aware of that exact case. the argument europeans are making is cyprus is a very unique situation, and indeed it is unusual to have a banking sector is large as they have relative to their economy.
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united states, fdic insured deposits and very proud of the fact that we have ever los nevea dime of insured deposits and in the crisis response was to increase levels of deposits that were insured. i consider that to be extremely unlikely in the united states. >> would you be in favor of reducing the flow of stimulus which we had another month or two as we did in february of job growth and unemployment rate dropping long-term unemployed didn't change much and unrelated question, how much of a pickup do you expect to see in the labor force participation rate and what will be needed to see for that to show substantial improvement? >> on the first question, but is
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a decision for the committee, we will have to make a judgment about how sustained the improvement is. long-term unemployment is one dimension of the unemployment problem. but i would think probably the best way to get a long-term unemployed back to work is to get an overall strong labor market and we are looking at the overall key indicators like overall unemployment rate, payrolls and hiring and some of the other things that i mentioned. the other part of your question was about labor force participation. labor force participation has been declining on a trend like bases in the united states for a while. that is a result mostly of demographic factors, partly the aging of the population, partly the fact female participation is
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no longer increasing, it is decreasing a little bit, also the case people of working age has declined for a number of different reasons, so there's a trend underlining this and in addition there are probably some people left the labor force because they are discouraged and cannot find work, so the economy strengthens i would suspect to see some of these folks coming back into the labor force for example the number of people who are out of the labor force would like a full-time job and are not unemployed, that number is actually going up which suggests more people thinking about going back into the labor force going back to work. but i doubt in the near term at least we will see an increase in labor force participation because besides the effects of the slow recovery, high unemployment has a downward
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trend in the u.s. which is not due to the recession, it is due to underlining demographic factors. >> from "national journal." you argued that monetary policy was not the right tool for dressing on such bubbles, but in january he suggested there may be a role for it even if not the first line of defense. how has your thinking evolved and can you explain why? >> i still believe the following, which is monetary policy is a very blunt instrument. if you are raising interest rates to pop an asset bubble, even if you ar you're sure you o that, you might at same time they throw the economy into recession which kind of defeats the purpose of monetary policy.
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and therefore i think the first line of defense. i think we have multiple lines of defense, very extensive and sophisticated monitoring at a much higher level and much more comfort hensley and we have had in the past, and we have regulation where we work with other agencies to try to cover all the uncovered areas in the financial system, and in addition we try to use the communication and similar tools to affect the way the financial market response to monetary policy. so we do have some first lines of defense which should be used first. that being said, i think given
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the problems we have had, globally in the last 15, 20 years that we need to at least take into account these issues as we make monetary policy, and most people would agree with that. what that is exactly depends on the circumstances. if the economy is in a very weak condition in interest rates are very low for that purpose, it is very difficult to contemplate raising rates a lot because you're concerned about some sector in the financial fear. if you're in an expansion in the credit boom going on, the case in that situation for making policy a little bit tighter might be better. so as i have said many times i have an open mind on this question, learning, all central bankers are learning, but in the point i made in my very first
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speech in 2002 as a governor in the federal reserve where i argued the first line of defense should be the more targeted tools including revelatory tools and some extent macro prudential tools for emerging markets use. >> as tempted as it may be to end with your view of the national debt, in line with what john asked you about your future, given the unprecedented nature of fed policy on our watch in the uncertainty of the exit strategy, to what extent do you feel personally responsible to be at the helm when those decisions are made and how does it affect your future and at the press conference you are asked if he spoke with the president about your future and you said you hadn't at that time, can you tell us at least if you had that conversation? >> have spoken to the president
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a bit, but i don't really have any information for you at this juncture. i don't think i'm the only person in the world who can manage the exit. in fact, one of the things i hope to accomplish and was not entirely successful of that as governor or chairman of the federal reserve was to try to depersonalize to some extent monetary policy and to get broader recognition for the fact that this is an extraordinary institution that has a large number of very high quality high quality policymakers. it has a terrific staff. in literally dozens of ph.d. economists to have been working through the crisis trying to these issues and implement our policy tools. and there is no single person who is essential to that. again, with respect to my personal plans, i will certainly
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let you know when i have something more concrete. thank you. >> thank you. >> i am not the only one that can manage the exit from qe. a fitting statement from our federal reserve chairman, wrapping up one hour of q&a with the financial press, including, of course, fox business peter barnes. several things were discussed. in particular reporters in the room a very curious about the stress test. several questions. and, of course, the fed mandated policy and his monetary policy they have a dual mandate. manage the employ of the situation in this country. the picture in this country and also monetary policy. a piece of that is the dollar. a couple of things i found interesting. the fact really the fed only have so many tools when it comes to the deployment -- upon the situation. the fed chairman is saying, look , there's only so much that we can do.
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the demographics of the unemployed in this country. also, talking about the issue of cyprus and saying that it is a small island. yes, it is an issue, the issue is happening, even though they have affected financial markets here. certainly that is not an overall worry. i am cheryl in for liz claman for "countdown to the closing bell." thirty-two minutes left. let's get right to our floor show. we have traders standing by at the new york stock exchange and, of course, the nymex. i first want to get to mike down at the nymex. thank you so much for standing by. i want to ask you. all of the policies that we have had the last four years, in particular the effect on the u.s. dollar, somewhat of a dance for you all down at the nymex and how you trade well, how you treat natural-gas. anything that you heard on monetary policy today that kind of stuck at? >> you really didn't say anything that we really didn't know already. rate's going to be where they're going to be for a while, protecting the housing market.
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from a collapse. so as far -- we are treading that water. i think this market in particular is more worried about a geopolitical situation in the middle east rather than, you know, fed policy right now. we do have to keep an eye on the dollar and what that does verses what fed policy is going forward. we have had this policy for four years, like you said. so that dance that we are doing here in the crude pits, at the $90 -- staying in a range. the thought in the back of our minds, we're actually taking more of a geopolitical thinker rather than listening to the chairman. cheryl: geopolitical and potentially the middle east. >> exactly. yes. exactly. that's what i'm looking at. as far as the oil markets, as far as the other market, the stock market and everything else, i think it's worth questioning the money supply. the money has to go somewhere. that is why we are on highs even though our growth is not there. the stock market is up because there are more buyers than sellers. think about it.
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cheryl: we are certainly seeing the inflow into equities. it will probably continues as we have not heard a lot from the fed chairman with regard to the market except we did see a market doing pretty good. jonathan is standing by right now on the floor of the new york stock exchange. i want to bring the issue of the dow and the movement that we saw going into the fed's decision. a new intraday high, 14546. we can be specific. looks like traders liked what they were seeing. maybe it was what they did not hear, big changes in fed policy they. >> just like mike said, we have everything that we were expecting. it was the same script we have seen before, just a few of the words of unchanged. so from their allies were going to get something that will really, you know, blow our socks off the market was going to stay in trend in the san direction. we got a little pullback. expected we hear from washington. everyone kind of seems to pause ffr a little bit. when you see that you will see the market come back, but it seems that this trend is going to continue. look back to monday and tuesday.
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this market continues to shake off bad news. whenever bad news is, i mean, the news that is coming out of cyprus is not bad news, thhn i don't know what bad news is going to be. right now the market continues to shrug is off. time of economic data tomorrow. we will probably get conflicting data. once again, a pattern that we have seen before. the market will find the good news and continue to trend higher. cheryl: i want to ask you about something that the fed chairman said in response to a question from our own peter barnes. equi reaction to the qe program. and he said we are not measuring politics except to buy stock prices. stock prices are reacting to fed policy and have been for some time. >> absolutely, and selected trend is your friend if the money is coming into the market and investors in the government keeps investing in the market, then investors will get back on board and put their money back in year. like mike said before, where will the money go? it has to come back to this equimark. we are seeing in close.
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as you continue to get through earnings season, alick is been pretty solid. earnings reports been pretty solid. at think that the feel good story, it continues to be. yes, there are still things that can derail the market. middle east prices, if what happens in cyprus can spread to other places. there are other headlines out there that can hurt us. our unemployment number moving in the wrong direction. time will tell, but as for now we have built a series basin foundation. cheryl: thank you very much. reaction from the floor of the new york stock exchange. we will begin their 28 minutes from now when the bell will ring. nice market. positive reaction to what we have heard now from fed chairman ben bernanke. coming up, we will be talking with one of our favorite fed insiders. william poole. call in built. a former air reserve bank president. he will be joining me to get his reaction and talk about what he did in year -- didn't hear from the chairman did bernanke. we'll be right back. we'll be right back. ♪ all stations come overo mission a for a final go.
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♪ cheryl: let's check in with nicole petallides on the floor of the new york stock exchange. we also have jeff flock standing by in the pits of the cme. want to go first to you. a lot of new highs being hit today. >> that's right. all taken from there. we have the market at new highs. the dow jones industrial moving to all-time records intraday highs. several names on the dow jones industrial average that are hitting high -- lifetime highs. we will take a look at some of the food highs because of the general mills numbers. general mills is talking about
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core volume growth. you think of general mills. you think of cheerios and some of the other things that they make like hamburger helper and such. you can see, general mills is a nearly 3%. of all that has been going on, it certainly seems to be a safe haven. take a look as some of the other names in the group. you can look at j&j snack food, kellogg, carmel, mccormick, the spices. general mills would be in this list. hershey in power, known for tasty treats. now, all of these names are actually hitting a lifetime highs. you're looking at robust earnings growth. in the group that is doing very well regardless of a tough eurozone. cheryl: thank you very much. consumer names are really getting the attention. we do have the fed decision coming down. were you looking at? >> reporter: starting to get more interest in the futures contract. i am in the middle of the pit right now. futures and options.
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i want to get to that in just a moment. up over -- well, about a dollar on the day. it was held hostage until you get the fed announcement. but futures, this is the pit where they make bets. take a look at these percentages i put my glasses on. the next meeting of the fed, which is may 1st 2013, there was a 0 percent chance according to the fed funds futures that there will be any kind of move and an interest-rate. the april meeting, 12 percent, the october meeting of top teefourteen, 31%. you finally get a 50-50 chance of the fed interest-rate move in march of 2015. i don't even know if i'll be alive in march of 2015. that's a long way away. cheryl: you will be working for fox business, and short. thank you very much.
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of course nickel. thank you. some reaction from a man who has been on the inside of the fomc meeting. william poole, a former solicitor reserve bank president joining me now in a fox business exclusive from newark, delaware. it's always good to talk to you. but i am curious, you know, we have been sitting with this low interest-rate policy since 2008 we have been sitting. and again today, the vote, a 11- 1. are you surprised? >> no. what we are seeing is a thoroughly boring monetary policy environment. nothing has happened. a lot of detailed nuances, minor changes in wording in the fed statement. actually, that's what we ought to want. monetary policy ought to be as boring as the electricity supply. when you turn the light switch on you want allied-signal one. you don't need to know anything more.
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that's where we are right now. but there is an issue lurking in the background that needs to be discussed. it is not being discussed in the market or in the fed. cheryl: what is it? >> that issue, that issue has to do with congress -- granting that fed the party in 2008 to pay interest on bank reserves. and that interest is now only about 5 billion per year at 25 basis points. but at an interest rate of 1 percent where the fed is going to be going in some places along the way that would be four times as much. assuming that reserves are in the neighborhood of 2 trillion which is where they are no. as the fed goes of, go to 2% that doubles once again.
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think about the fiscal clef the legislation that was accomplished at the very end of last year, signed into law the beginning of this year. there are a lot of deals made at the very last minute. this stuff in that bill, if you look at it closely, it was -- you might throw special interest groups and so forth. i can well imagine that some point when we have another down to the cliff incredible to fight about our fiscal policy that an issue gets slip then, a provision it slipped in to what that would do would be to increase projected revenues coming into the treasury out of the federal reserve. tens of billions of dollars. it's a very tempting target. but if that were to happen it would throw federal reserve policy into chaos because the fed is relying on paying
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interest to be able to neutralize bank reserves in the future. it is an issue that must be discussed in the market. cheryl: you're right. that is not something that has been discussed thoroughly. you're doing it now. i'm actually glad you are. i think the other thing that i kind of perked up about one was listening. talking about the labor market. that dual mandate day after monetary policy in the employment picture. we're still kind of sitting in this environment or even the fed chairman himself in front of a television camera is talking about the fact that the demographics are shifting into have a lack of labour participation. and the markets. do you think they are doing enough right now to support the employment situation in? he seemed himself a bit frustrated, frankly. >> the problem with the economy today has nothing to do with monetary policy or with financial conditions. the problem is that the economy has been held back by a slew of
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regulatory uncertainty and tax uncertainty. the economy is not being held back by monetary policy. is being held back by fiscal policy. that may be changing. looks like we have someone stronger economic data recently because, perhaps, the fiscal policy environment is settling down a little bit. but just to use a very simple example, everybody has heard about this xl pipeline that the canadian company wants to build across the board. the fed can't permit that pipeline. it would be creating jobs. jobs that will be created are there. cheryl: have been bernanke could go over to congress and walked down the street and put the policy in place himself you would. he has been very vocal in his frustration with our nation's leaders. william poole, a former st. louis federal reserve bank president. very interesting talking points. we appreciate your time. >> good to be with you.
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cheryl: the closing bell will ring. we are almost done. sixteen minutes to go, and the dow, up 82 points. so approaching session highs. the dow is up more than 10% for the year. s&p is up about 9% so far for the year. curious if the decision to keep pouring money from the fed will push these markets fire. that is a question. the best place to pour your money into the market. coming up next. ♪ investor. yeah, i'm a serious investor but i'm a busy guy. it used to be easier but now there armore choices than ever. ii want to know exactly whow much i'm paying.n. i want to use the same stuff the big guys use. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investnt objectives, risks, charges and expenses. read and consider it carefully before investing.
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♪ cheryl: you know, we are so close right now to a new all-time close, a new all-time high close for the dow. up 14,548. 14,005 or nine.
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we are right at potentially a new record close for the dow. s&p, most likely not going to make it. 1565. we're not close there. the dow is really a nail biter. we're sitting there now. a new intra-day record was it today on the dow jones industrial average. we have ten minutes to go. we will keep on it. as these markets continue to move higher, a big piece of this isn't -- decision today, the next play for your portfolio. you're the best ways to make use the money. in business strategist. we have this final number. what do you make of this? are the place to be made in austin minutes of trading? >> i would look at the last ten minutes. unlike a longer-term view. step back for a few months. look at the excessive optimism that we have right now. even if we do get a new high in the s&p area or the dow, i'd look to be a little more
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defensive in the near term before getting a little more aggressive with more cyclical areas as we move into the summer months. cheryl: so you are little cautious. it's a little fun to have the numbers as we go into the close. you understand. let's talk about some of the consumer names. the new york stock exchange, a lot of the big consumer names hitting new highs. fresh all-time highs. you like the consumer groups. >> in the near term i like consumer staples for the defensive characteristics. i don't get into specific companies. i couldn't recommend anything right here. the staples right now look to be doing pretty well. obviously news from that sector is helping. underneath the surface you have broad participation, good momentum. they seem to be doing pretty well relative to the rest. cheryl: maybe a buy. do you feel the same way about the health care sector? traditionally very defensive area to be in. cheryl: certainly. health care is interesting
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because like you said, is typically defensive but has been one of the best sectors. we have gone away from some of those defensive characteristics. >> the demographics of the country. >> the big positive place. the big piece has been apple. a group you're looking for a pullback would you avoid technology. >> i would avoid it right here. i think ultimately technology is going to work. if you look below the surface, some of the smaller and madcap areas of technology seem to be doing better. blackie said, get rid of the elephant and the room. the sector overall it's a little bit better. again, i would wait to see a change in trend.
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perhaps later this year degressive. cheryl: you been talking about the fed today. obviously the decision from the fed chairman. sitting in for years of the fed just pushing liquidity do you think that the markets would survive if and when we got a pullback from the fed on qe? >> i almost think that would be the best thing for the markets over longer-term perspective. for the fiscal policy makers to finally make some decisions and we could start to make some longer-term progress in terms of economic growth and move to a new secular bull market as long as the fed is supporting the market and is pumping liquidity into the market. that may it that much harder for the fiscal policy makers to step up to the plate and make the tough decisions that need to be made. cheryl: obviously watching the dollar. gold, gold is still something you would recommend. >> longer-term yen.
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we have pretty much every major central bank looking for ways to build more liquidity in the market. cheryl: okay. in business strategist. he's not sweating the last few minutes, but we certainly are looking at the closing bell as we get close to 4:00 p.m. eastern time. 14,549. that is the record close. we have pulled back. six minutes. we shall see. a record close. we will have you covered. market those coming up after a quick commercial break. don't move. you never know. ♪
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